U.S. Specialty retailer in action sports related apparel,
footwear, equipment and accessories,
Zumiez Inc.
(
ZUMZ
) will release its fourth-quarter and full-year 2011 results on
Thursday, March 8, 2012.
The current Zacks Consensus earnings per share (
EPS
) estimate for the fourth quarter is 59 cents, representing an
increase of 20.3% from last year. The Zacks Consensus Estimate for
full-year 2011 stands at $1.18 per share, reflecting a
year-over-year growth of 34.4%.
The company has continually delivered positive earnings
surprises, outplaying the Zacks Consensus Estimate in the past four
consecutive quarters. Zumiez's third quarter witnessed a positive
surprise of 9.8%. The company's average surprise for the trailing
four quarters comes to 68.5%.
Third-Quarter 2011 Recap
Backed by strong merchandising, new store opening and e-commerce
strategies along with improved margins, Zumiez Inc. reported a
strong third-quarter 2011 result. The quarterly earnings of 45
cents per share beat the Zacks Consensus Estimate of 41 cents and
surged 12.5% from the prior-period level of 40 cents.
Net sales in the reported quarter climbed 13.3% to $154 million
from $135.9 million a year ago. Comparable store sales rose 6.0% in
the quarter compared with an increase of 14.4% in third-quarter
2010. Moreover, total revenue also surpassed the Zacks Consensus
Estimate of $153 million.
Guidance
Zumiez raised its sales and earnings guidance range during the
release of December 2011 comparable sales result. The company
raised its fourth-quarter 2011 sales guidance in the range of $180
- $181 million from $174 - $177 million forecasted earlier.
Moreover, based on the prediction of a high-single-digit growth
in comparable store sales, Zumiez now expects fourth-quarter 2011
earnings to be in the range of 57 cents to 58 cents per share,
instead of the previously announced guidance range of 52 cents to
54 cents.
Agreement
Of the 14 analysts providing the estimates, only one analyst
revised its fourth-quarter estimate upward in the last 30 days.
There was no downward revision witnessed in the 30-day period. None
of the analysts either raised or lowered their estimate in the last
7 days. For fiscal 2011, 1 out of 17 analysts raised the estimate
in the past 30 days, with no downward revisions in the same period.
In the last 7 days, analysts kept their estimates intact with no
movement in either direction.
For fiscal 2012, 9 out of 17 analysts raised their forecasts in
the last 30 days, while none of them slashed estimates. In the last
7 days, estimate revision trends were similar to the 30-day period
with 9 analysts raising estimates with no downward revisions.
Magnitude
Estimate revisions by analysts point to an upside in the Zacks
Consensus Estimates for all discussed time periods. With one
analyst moving up estimates, the Zacks Consensus Estimate for the
fourth quarter upped by a penny to 59 cents per share in the last
30 days. Over the last 7 days, fourth-quarter estimates remained
stable with no movement in analyst estimates.
Despite one upward movement in analyst estimate for fiscal 2011,
in the last 30 days, estimate remained intact at $1.18 per share.
In the last 7 days, the estimates were stable with no revision by
analysts. For fiscal 2012, 9 analysts upped their estimates in both
the 30-day and 7-day periods, bringing the Zacks Consensus Estimate
up by 2 cents to $1.40 per share for both periods.
Our Take
Everett, Washington-based Zumiez targets young men and women in
the age group of 12 to 24 years, who seek popular brands that
represent a lifestyle centered on extreme sports activities. We
expect Zumiez's focus on teenage action-sports based merchandise
and expanding store network to deliver solid performance in the
upcoming quarters.
Zumiez's stores span across 2,900 square feet on an average, and
feature couches and video game stations to entice customers to shop
for extended periods. These stores are strategically located near
busy areas of the mall, such as food courts, movie theatres,
music/game stores and other popular teenage hang-out destinations.
As of February 25, 2012, the company operated 434 stores in the
United States and 10 stores in Canada.
We believe Zumiez's niche focus on teenage action-sport based
merchandise, commitment toward store expansion and a healthy
balance sheet augur well for future operating performance.
However, intense competition from other specialty retailers like
Hot Topic Inc.
(
HOTT
) and
Pacific Sunwear of California Inc.
(
PSUN
), seasonal nature of the business and risks associated with
sourcing merchandise from foreign countries may weigh upon the
company's results.
Currently, Zumiez holds a Zacks #2 Rank, implying a short-term
'Buy' rating on the stock. However, we retain our long-term
'Neutral' recommendation on the stock.
HOT TOPIC INC (
HOTT
): Free Stock Analysis Report
PAC SUNWEAR CAL (
PSUN
): Free Stock Analysis Report
ZUMIEZ INC (
ZUMZ
): Free Stock Analysis Report
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